Nokia, the Finnish telecommunications equipment producer, announced on Thursday that it intends to eliminate up to 14,000 jobs globally, accounting for 16% of its total workforce. The decision forms part of a strategy to curtail expenses, in the wake of a significant downturn in third-quarter revenue and profit.
The corporation maintains that the forthcoming cuts are critical to decrease operational costs and streamline efficiency under prevailing market uncertainty.
In a bid to lower its operational cost base, Nokia aspires to reduce it in the range of 800 million euros to 1.2 billion euros before the conclusion of 2026. This strategic move anticipates reducing the number of employees from the current strength of 86,000 to a range of 72,000 to 77,000.
It was reported that Nokia’s revenue in the third quarter plummeted by 20%, equating to a decrease from 6.24 billion euros to 4.98 billion euros, year on year. Similarly, the net profit tumbled to 299 million euros, from an earlier figure of 551 million euros in the July-to-September quarter of the previous year.
The mobile networks business, the principal revenue generator for the firm, registered a 24% fall to 2.16 billion euros. This was majorly attributed to underperformance in the North American market, causing the operating profit for this unit to shrink by 64%.
Despite these setbacks, Nokia CEO Pekka Lundmark stated, “We remain optimistic about the mid-to-long-term potential of our markets. The evolution of cloud computing and AI necessitates extensive enhancements in network capabilities, requiring substantial investment.”
Uncertain about when market conditions might revive, Lundmark emphasized that Nokia was “adopting firm measures at three levels – strategic, operational, and cost.” He expressed his conviction that the steps being taken would fortify Nokia and accrue substantial benefits for its stockholders.
Among the largest providers of 5G, the latest broadband technology, Nokia operates alongside international competitors like Ericsson from Sweden, Huawei from China, and Samsung from South Korea. Earlier this year, Ericsson revealed its strategy of reducing its global workforce by 8% with the objective of cutting costs.